The Commerce Department’s Census Bureau said on Wednesday that factory orders rose 0.6% after a 1.8% rebound in January. Economists surveyed by Reuters predict factory orders will climb 0.5% with a pre-reported 1.7% in January. Factory orders rose 1.5% per year in February. Manufacturing, which accounts for 10.2% of the economy, could suffer tariff losses from President Donald Trump since returning to the White House in January.
Trump promised to announce global reciprocity tariffs on Wednesday, which he called “Liberation Day.” He believes tariffs are tools to increase income to offset his promised tax cuts and restore a long-standing U.S. industrial base. Economists disagree and regard import duties as harmful. The Supply Management Institute report Tuesday showed its manufacturing PMI returned to shrinking territory in March after two consecutive months of expansion, with companies overwhelmingly voicing concerns about tariffs.
Domestic manufacturers rely heavily on imported raw materials. Import tax is expected to increase production costs and pass it on to buyers of finished products. Companies can also rule workers to protect profit margins.
Commercial aircraft orders fell by 5.0%. Orders for cars, parts and trailers increased by 1.9%. Transportation equipment order 1.5%. Orders for computers and electronics have not changed, while orders for electrical equipment, appliances and components have rebounded by 1.9%.
Machinery orders increased by 0.6%. Excluding transportation equipment, factory orders rose 0.4%. The government also reported that orders that exclude non-defense capital goods, which exclude aircraft, were considered a measure of commercial spending plans on equipment, fell 0.2% in February, rather than 0.3%, as estimated last month. The cargo of core capital goods jumped 0.8%, down from the 0.9% reported previously. Commercial spending on equipment is expected to rebound in the first quarter after the fourth quarter contraction.
